'Pharma Bro' Shkreli convicted of US securities fraud

Pic: AFP

By

AFP

PublishedSaturday, August 05, 2017

A US jury returned a guilty verdict Friday on three out of eight counts in the securities fraud trial of former hedge fund manager and pharmaceutical executive Martin Shkreli, once dubbed "The Most Hated Man in America."

The 34-year-old was convicted of conspiracy to commit securities fraud and two counts of securities fraud by a 12-member jury who deliberated five days at a federal court in Brooklyn, New York.

But he was acquitted on more than half the charges, including the most serious crime of conspiracy to commit wire fraud in three alleged inter-related schemes to defraud investors and misappropriate assets.

Shkreli, who remains on bail at least until his sentencing, is best known for jacking up the price of HIV drug Daraprim from $13.50 a pill to $750 overnight in 2015. Although that incident had nothing to do with his trial, so great was his notoriety that it was initially difficult to find an impartial jury.

An upbeat Shkreli hailed the verdict.

"I'm delighted that the jury did their job," he told reporters outside court, dressed in a dark polo shirt and thanking his star defense attorney Ben Brafman, calling him the "greatest lawyer on the planet."

"This was a witch hunt of epic proportions. Maybe they found one or two broomsticks, but at the end of the day we've been acquitted of the most important charges in this case," he added.

Shkreli faced an eight-count indictment for allegedly stealing $11 million in stock from his first pharmaceutical company Retrophin to pay off investors who lost money in two of his hedge funds.

He had faced up to 20 years in prison. On Friday, Brafman -- whose famous clients have included disgraced IMF boss Dominique Strauss-Kahn -- suggested that Shkreli could even avoid jail time.

"It allows for a sentence that doesn't even have to include a period of incarceration and if it does, to be honest with you, a much, much lower period of incarceration than the government ever contemplated," he said.

'Lies upon lies'

Wrapping up their month-long case, government prosecutors had told jurors the evidence against Shkreli was overwhelming, arguing that he told "lies upon lies" to investors for years in running a Ponzi-like scheme.

"Rest assured we will continue to investigate and prosecute those who engage in schemes to defraud such as this one," a senior prosecutor told reporters Friday after the verdict was returned.

But the defense maintained that Shkreli's wealthy investors ultimately made money rather than incurred losses.

Allegations otherwise were "rich people's BS," Brafman, one of the most celebrated criminal defense lawyers of his generation, told jurors last week.

Shkreli declined to testify and the defense called no witnesses.

Instead Brafman portrayed Shkreli as a troubled genius who camped out in his office in a sleeping bag for two years to build single handedly a successful pharmaceutical to ultimately repay wealthy investors.

Working at a super-human pace, he may have made mistakes but he was "not a Ponzi guy" who took other people's money to lead an extravagant lifestyle.

Instead he conceded that his client had "impossible" people skills and routinely aggravated associates.

He quoted one witness who compared Shkreli to the Dustin Hoffman character in Oscar-winning 1988 movie "Rain Man," and said he battled depression and anxiety.

The ex-boss of Turing Pharmaceuticals, Shkreli earned the label "most hated man in America" for his price hike of Daraprim.

He smirked through a congressional hearing that scrutinized his actions and has since earned a reputation for an extravagant, self-publicizing lifestyle.

He resigned from Turing shortly after his indictment in December 2015, after which he was released from prison on bond.